ProShares is rounding out its lineup of cryptocurrency-linked ETFs with the launch of the ProShares Short Ether Strategy ETF (SETH), the first-ever short Ethereum-linked ETF.
The fund gives investors the chance to profit from the declines in the price of the cryptocurrency ether and will deliver the inverse of the daily performance of the S&P CME Ether Futures Index, according to Simeon Hyman, global investment strategist at ProShares.
“It ain’t so easy to short cryptocurrency,” he said. “It’s not like shorting a stock.”
The new fund follows an investment style similar to that of ProShares’ other cryptocurrency-linked ETFs in that it uses futures contracts to seek exposure.
“One of the nice things about futures exposure is—both for bitcoin and ether—their settlements are based on aggregate multi-exchange prices,” Hyman said. “There is no one price for bitcoin or ether [and] there are multiple prices out there, so futures do a nice job of accessing a range of these exchange prices for settlement.”
The Short Ether Strategy ETF, along with the other cryptocurrency-linked ETFs in the lineup, can be effective as part of a portfolio, but investors should practice restraint with it, Hyman said.
“Theory tells you that if you have an asset out there that zigs when a lot of other things zag and it’s a bit volatile, if you sprinkle a little of that in a portfolio of traditional asset classes, you can really improve the efficiency of the portfolio,” he said.
The new ETF went live last week and is available on a number of platforms, though the firm declined to state which ones. The Short Ether Strategy ETF has a 95 basis point management fee.
It’s the latest in a series of ETFs that ProShares has launched linked to cryptocurrency. Two years ago, the firm introduced the ProShares Bitcoin Strategy ETF (BITO), which tracks the bitcoin market. It’s become the largest crypto-linked ETF in the world, according to the firm.
The firm launched the ProShares Short Bitcoin Strategy ETF (BITI), the first U.S. short bitcoin-linked ETF, last year. Last month, the firm introduced the ProShares Ether Strategy ETF (EETH), an actively managed ETF; the ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE); and the ProShares Bitcoin & Ether Market Cap Weight Strategy ETF (BETH).
“This fills out for now our suite and offers short exposure to ether alongside its bitcoin short colleague,” Hyman said. “We’re pretty darn happy to be offering exposure to the No. 1 and No. 2 cryptocurrency both in their long and short and blended formats.”